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The market slowdown begins to pinch across Asia
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The market slowdown begins to pinch across Asia

Asia Tech Review: 7 June 2022

Jon Russell
Jun 7
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The market slowdown begins to pinch across Asia
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Welcome back,

It’s been a busy few weeks at ATR HQ which is why the newsletter hasn’t been arriving every week. Never fear, this issue we’re back with a host of stories for your catch-up pleasure, mostly on the bearish market conditions which are impacting Chinese VC deal volume (down significantly), big deals in India—especially edtech—and those in Southeast Asia jostling to join the unicorn club.

Elsewhere, ByteDance is plotting a return to India; 15-minute deliveries are getting hot in Southeast Asia and Amazon’s e-book service is bidding adieu to China.

Until next time,

Jon


China

The Chinese government is reportedly aiming its online commenting and bot army at women of Asian descent who have public platforms, opinions and expertise on China link

What goes up fastest, will come down fastest in a decline: hence China is leading the global decline in VC deals—the value of venture deals in the country tumbled 44% to $24.7 billion in the first four months of the year, compared with a year earlier, according to data from the research firm Preqin link

China’s influencers are also struggling with brands said to be realigning their marketing budgets from live-streaming celebrities to their own channels—that’s reportedly down to continued  regulatory crackdowns on streaming, increased fees and—of course—the uncertain economic situation link

Xiaomi-linked companies have faced increased scrutiny by China’s regulators, with some pausing planned initial public offerings after being questioned about their close relationship with the smartphone giant link

Amazon plans to close its China-based e-book service next year, following fellow US firms LinkedIn and Airbnb in leaving the country link

China-backed hackers are exploiting an unpatched Microsoft Office zero-day vulnerability, known as “Follina”, to execute malicious code remotely on Windows systems link

China’s Android smartphone makers, including Honor and Realme, are looking overseas for growth as their domestic market sales slow due to economic uncertainty link

India 

ByteDance could return to India with reports suggesting it is close to a partnership (with Hiranandani Group, which runs a data centre) and already hiring previous and new staff for the reentry link

Perhaps as part of the plan, ByteDance has fully exited its investment in VerSe Innovation, which runs short video platform Josh and news aggregator DailyHunt—but it did so at a 56% discount link

But that’s not stopped others from increasing their warchest. ShareChat raised $300M from Google, Times Group and Temasek Holdings at $5B valuation—the deal is Google’s second in the short video space following its investment in Josh link

Despite that deal, India’s flood of venture capital for startups is showing signs of drying up in the last two months. April 1-May 16 saw just 9 funding rounds of more than $100M, reaching a cumulative $2B—that’s compared to 27 deals from  January-March this year. That’s an early indicator to keep an eye on link

India’s edtech bubble could be about to burst with once hot firms now forced to make layoffs and watch costs more closely for the first time—that’s a far cry from constant fundraising and hockey stick growth link

India is considering whether to set up an appeals panel with the power to reverse the content moderation decisions of social media firms, according to its information technology ministry link

Temasek in talks to invest in DotPe, a Google-backed company that helps businesses in India go online and sell digitally, as part of a round that’ll reportedly bring in $50M link

Fintech Slice is now valued at $1.5B after raising $50M to scale its recently launched UPI payments product and push to make its core credit business profitable link

The Indian open network for e-commerce—a bold alternative to gated services like Amazon and Flipkart—is reportedly in talks with ITC, Unilever and Dabur while Shopify may join too link

Math tutoring startup Cuemath raised $57M at a valuation of $407M—that’s apparently double what it raised at in December 2020 link

Customer engagement platform MoEngage raised $77M led by Goldman Sachs Asset Management and B Capital link

A PhonePe-BCG study concludes that India’s digital payments market will grow 3X to reach $10T by 2026 link

Southeast Asia

GoTo saw impressive growth of 53% in its first quarter as a public company but it came at cost as losses more than tripled to reach some $450M—higher than gross revenue of $357M. One issue is the firm doesn’t report financials the same way as those in the US (ie Grab) making direct comparisons tricky link (In related news: GoTo founder Kevin Aluwi is moving into an non-executive role and the firm is reportedly expanding its BNPL services as part of a ‘push for profitability’)

Ant Group is joining the digital banking fray for real after it announced a Singapore bank called ANEXT—the firm was one of the winners of a digital banking licence last year alongside Grab-Singtel and others link

Indonesia-based crypto exchange Pintu landed a $113M Series B to take it past from $150M from investors—those in the new round include Intudo Ventures, Lightspeed, Northstar Group and Pantera Capital link

Quick commerce is going big in Indonesia after Astro, which promises 15-min deliveries in Jakarta, landed a $60M round from Accel, Tiger and others—can it last with peers in the US already making layoffs? Link

Traveloka is reportedly close to raising more than $200M from investors after ending talks to go public via a merger with a blank-check company last year (smart move, guys!) link

Lazada has a new CEO with ex-Thailand head James Dong replacing company veteran Chun Li after a two-year stint link

Long-standing SEA VC Golden Gate Ventures is opening two offices in Vietnam to double down on tech investments in the country link

Many say SE Asia tech is sheltered from the downturn as valuations are comparatively low, but Jakarta’s “soonicorns” are already laying off hundreds to acclimatise. Here’s the money quote: “Those who can stay alive are the ones who will win the market.” link

Y Combinator alum HitPay raised $15.75M led by Tiger Global link

For the first time ever Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions link

Disney+ Hotstar leads Q1 subscriber growth in Southeast Asia, but we know it is a long battle link

Novoloop, a plastic upcycling startup, raised a $10M led by South Korean chemical firm Hanwha Solutions and Mistletoe, the firm from Masa Son’s brother Taizo link

Indonesian hyperlocal social commerce app Super raised a $70M Series C link

South Korea

South Korean content providers are raising service fees in the wake of Google’s in-app payment policy link

Temasek’s Pavilion Capital invested $50M in AI chip maker Rebellions link


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Alex Barredo
Writes Daily # Jun 7

insightful as always!

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